Ag markets proved surprisingly volatile on Thursday

Disappointing export sales exaggerated early Thursday corn losses. Traders reportedly expect the USDA to boost its estimates of global corn supplies on tomorrow’s big reports, which seemingly weighed on CBOT futures Wednesday night. Those losses grew after the weekly Export Sales report stated last week’s result well below forecasts. March corn futures fell 5.0 cents at $4.12 bushel at their Thursday close, while May dropped 5.0 to $4.2025/bushel.

Short-covering apparently boosted the soy complex Thursday. CONAB published its latest soy production estimate for Brazil this morning. That was largely unchanged around 90 million tonnes, but Brazil’s Ag Minister stated that the crop could ‘easily’ top 95 million. The Export Sales total also fell far short of expectations. And yet, CBOT future rose moderately at the close. Traders were probably taking profits on short positions ahead of tomorrow’s USDA releases. March soybeans settled 4.5 cents higher at $12.7475/bushel Thursday afternoon, while March soyoil climbed 0.28 cents to 37.96 cents/pound, and March soymeal added $1.8 to $414.3/ton.

The wheat export data also disappointed. Overnight soy gains may have sparked buying in the wheat markets, especially with traders likely looking for an excuse to take profits on shorts ahead of Friday’s USDA reports. However, the Export Sales report stated last week’s total about half of the smallest forecast, thereby sending most wheat contracts lower. Conversely, large premiums for quality grain apparently supported the Minneapolis market. March CBOT wheat futures dove 4.5 cents to $5.8425/bushel late Thursday afternoon, while March KCBT wheat futures bounced 2.0 cents to $6.39, and March MWE futures gained 2.25 to $6.31.

Cattle futures backed away from early highs. Rising cash and wholesale prices played a big role in the recent CME advance, and are expected to remain seasonally strong through the first quarter. However, traders now seem to suspect warming temperatures will boost fed cattle marketings and depress spot prices during the days ahead. As usual, much depends upon the outcome of this week’s cash trading. February cattle futures rose 0.02 cents to 136.55 cents/pound at their Thursday settlement, while April futures gave back 0.10 and closed at 136.87. Meanwhile, March feeder cattle futures moved up 0.27 cents to 168.82 cents/pound, and May added 0.25 to 169.92.

Wholesale strength seemingly supported hog futures Thursday. Wednesday afternoon cash and pork weakness apparently depressed hog futures in early trading. However, the Chicago market bounced substantially from early lows, thereby seeming to reflect expectations for the stronger result on the midday wholesale report. The rebound also had significant technical connotations. February hogs closed down 0.32 cents to 85.25 cents/pound Thursday, and June tumbled 0.45 lower to 100.60.